SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 3, 1999
SHOP AT HOME, INC.
--------------------------
(Exact name of registrant as specified in its charter)
Tennessee 0-25596 62-1282758
-----------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
5388 Hickory Hollow Parkway, Antioch, Tennessee 37013
----------------------------------------------------------
(Address, including zip code, of principal executive office)
(615) 263-8000
--------------------------------------------------
(Registrant's telephone number, including area code)
Item 2. Acquisition or Disposition of Assets
On June 3, 1999, MFP, Inc. ("MFP"), a Tennessee corporation and a
wholly-owned subsidiary of Shop at Home, Inc. ("the Company"), acquired the
assets and broadcast license of Television Station WBPT, Bridgeport, Connecticut
(the "Station"). The Station was purchased pursuant to an Asset Purchase
Agreement, dated February 26, 1999, by and between Paxson Communications of New
York-43, Inc., and Paxson New York License, Inc. (together referred to as
"Paxson") and MFP, as the assignee of the Company and as purchaser.
The obligations of the parties under the Asset Purchase Agreement were
subject to receipt of the approval of the Federal Communications Commission
("FCC") of the Application for Consent to Assignment of Broadcast Station
Licenses (the "Application") filed with respect to the broadcast license to be
transferred to the Company. The FCC published public notice of its approval of
the Application on April 29, 1999. The Company thereafter assigned its rights to
acquire the Station to MFP, and the FCC published public notice on May 21, 1999
of its approval of an application for its consent to this assignment.
The total purchase price of the Station (excluding minor closing
adjustments) was $21.0 million. Of the total purchase price, approximately $4.8
million was placed in an escrow account. The escrow account will be paid to
Paxson if the Station increases its cable household reach above that existing on
June 3, 1999. The escrow account will be paid to Paxson at the rate of $22 per
additional cable household added, with the final determination made six months
after the closing date, or in certain events 12 months after the closing. In
order for the full amount of the escrow account to be paid to Paxson, the cable
household reach must increase from the approximately 689,000 existing households
as of June 3, 1999 to 900,000 cable households. Paxson has previously filed a
petition with the FCC asking that it amend its rules to provide that the Station
be considered a part of the Hartford, Connecticut market, in addition to its
current designation as being in the Designated Market Area for New York City.
The petition has been partially granted by the FCC, but has not yet become final
and may be appealed. If the escrow account is not fully paid to Paxson under the
terms of the Asset Purchase Agreement, the remaining amount will be returned to
MFP.
Following the closing, MFP changed the call sign of WBPT to WSAH.
Funds for the acquisition of the Station was obtained from the a $1.0
million earnest money deposit previously made by the Company, and from the
proceeds of a bridge loan from a commercial bank in the principal amount of
$20.0 million, which loan was closed on June 3, 1999. On May 25, 1999 the
Company filed a Registration Statement with the Securities & Exchange Commission
on Form S-3, for the sale by the Company of 8,000,000 shares of its Common
Stock, par value $.0025 per share. The form S-3 has been amended by Amendment
No. 1 filed on May 27, 1999 and Amendment No. 2 filed on June 11, 1999. It is
the intention of the Company to use a portion of the proceeds of this offering,
if consummated, to pay the bridge loan in full.
The acquisition of the Station was accounted for by the Company as an
acquisition of assets and not the acquisition of a "business," as defined in SEC
Rule 210.11-01(d). Accordingly, no financial statements as specified in Item 7
of Form 8-K with respect to the operation of Paxson prior to the acquisition or
pro forma financial information with respect thereto is presented herein. The
Company reached this conclusion because the Station has not been historically
operated as a broadcast outlet for home shopping programming, and the Company
concluded that there was no continuity of revenues from the Station from which
relevant historical information could be derived. On January 5, 1998, the
Registrant received a letter from the SEC Division of Corporation Finance
confirming and agreeing with the Company's decision to account for a previous
purchase of broadcast stations as an acquisition of assets.
The Registration Statement contains disclosures regarding the
anticipated effects of the acquisition of the Station on the Company's financial
condition, liquidity, capital resources, and operating results. See "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources."
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SHOP AT HOME, INC.
(Registrant)
By: /s/ George J. Phillips
-------------------------------
George J. Phillips
Vice President and General Counsel
Date: June 16, 1999
